Even in the #MeToo era, with heightened sensitivity to sexual harassment claims and fears of damaging headlines, companies might take an allegation of sexual misconduct a little less seriously than they do a claim of financial fraud. A new study suggests — at least when it comes to their public image — maybe they should not.
In a working paper reported by the Harvard Business Review, researchers at UCLA and the University of Amsterdam found even a single allegation about sexual harassment can damage the way people view an employer. There does not need to be a Harvey Weinstein on the payroll, with multiple allegations in play, to have an effect.
Even after one alleged violation, said Serena Does, one of the paper's co-authors, "people adjusted their perceptions of how fair the organization was to men and women in much broader terms," she said. "What we show is that a single claim is enough to set that psychological process into gear. When people get cues like this, they adjust their perceptions of inequality."
Across several experimental studies using participants from the Amazon Mechanical Turk platform, the researchers found participants saw organizations with a sexual harassment claim not only as less equitable than those in a control group, where no misconduct was reported, but as less equitable in those with other transgressions, such as those with financial misconduct allegations.
That is logical, of course, given fraud has little to do with inequality. But the researchers also found people were more inclined to see harassment as a cultural problem — rather than simply the result of a bad apple — compared with financial misconduct. In addition, study participants' willingness to work for employers with a sexual harassment claim was lower than at those with a fraud claim.
The findings could be a compelling incentive for companies to take even initial allegations of sexual harassment more seriously. A survey released in April by Qualtrics and The Boardlist, which manages a directory of female board members, found only 25 percent of directors said their board had already taken actions as a result of sexual harassment allegations. Investors have also begun to see it as more of an investment risk.
Does said their newest research is examining why that may be, speculating it may be because of sexual harassment claims having a clearer victim, while those affected by financial fraud claims may be less obvious. In addition, she said, "people could be less likely to believe there's one single woman [making the claim] — where there’s smoke there’s fire." While "for fraud, a single case might be easier for people to imagine."
The good news for employers is a company's response can help with public backlash. When an employer was timely, informative and considerate toward the victim in their response, it helped diminish any damage to their image in participants' minds in the experimental studies, compared with those that tried to minimize the harassment allegation.
"The organization's response can help," Does said, "or it can make things much worse."